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February 28, 2013 6:03 pm
Vitol, the world’s largest oil trader, is forecasting another year of elevated energy costs, saying that oil prices are unlikely to fall from their current level of more than $110 a barrel.
The global benchmark Brent crude averaged a record $111.50 a barrel in 2012, providing the Opec cartel of producers with more than $1tn in revenues.
The oil market has since started this year even more strongly with Brent futures trading above $119 in early February as sentiment towards the global economy improved.
Geneva-based Vitol suggested that current prices are likely to be maintained.
Ian Taylor, Vitol chief executive said: “Following recent lower Opec production, price stability has been achieved and the market currently looks well balanced.”
Brent was slightly up on Thursday, trading 20 cents higher at $112.10 a barrel.
Vitol, whose views on the energy market are closely watched because of its close relationship with producers and consumers, painted a more bullish picture than official forecasters about the outlook for the US shale boom this year.
Surging production in North Dakota and Texas led last year to an 812,000 barrel a day increase in US oil production, the largest ever seen in the country that witnessed the birth of the oil industry more than 150 years ago.
But the US Department of Energy is expecting US output growth to plateau this year, adding 815,000 b/d.
By contrast, Vitol expects US supply growth to accelerate to 1m b/d this year. The trading house expects total non-Opec supply to grow by about 1.5m b/d, almost 50 per cent more growth than forecast by the International Energy Agency, the industrialised countries’ oil watchdog.
The privately owned trading house, which does not publicly reveal its profits, saw revenues of $303bn from global trading last year – a rise of $6bn from 2011 – even as the volume of crude and petroleum products that the company ships fell from 273m tonnes in 2011 to 261m tonnes last year.
Revenues are, however, a poor measure of traders’ performance as they rise or fall with commodity prices.
Rival traders believe that Vitol posted net income of about $1.2bn-$1.3bn for the year, down from the $1.66bn of 2011.
Vitol’s accounts become public about a year after the close of each financial calendar year, when the company posts its statements in the Dutch registry.
News, comment, analysis and interactive on the state of the global oil industry
“Unlike in previous years, which had the benefit of some asset disposals, the solid trading result in 2012 fully reflects our underlying trading performance,” Mr Taylor said.
Vitol also signalled its continuing appetite for purchases as it diversifies away from oil trading, saying: “We continue to look at a variety of new investment opportunities in the midstream and downstream energy sectors, which can deliver growth and synergy with our core trading business.”
Vitol bought a refinery previously owned by Petroplus, the bankrupt Swiss-based refiner, at a minimal value last year.
It also submitted a bid last month for Sterling Resources, a Calgary-based oil and gas explorer already partly owned by Vitol.
Additional reporting by Javier Blas in London
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